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Week 3 Assignment 1

Clarice Torrence

Strayer University

BUS499 Business Administration Capstone

Dr. Keller

Dr. Gardner

July 23, 2019

Week 3 Assignment 1

This assignment examines Apple Corporations and how internal and external factors directly impact the organization since its establishment by Steve Jobs, Steve Wozniak, and Ronald Wayne back in 1976. The assignment also strives to address the issue of how Apple uses the resource-based model and the industrial-organization model and how these models can be used by the company to improve its annual returns. The paper also determines the mission and vision of the company and how they contribute to the success of the firm. Finally, the stakeholder’s section examines how stakeholders of the company have contributed to the success of Apple Inc. with the recommendations made helping the organization in increasing its annual returns while reducing the costs it incurs in production.

Globalization

Globalization is the interaction and the subsequent integration both of firms, people, and governments worldwide with the need of interaction driven by international investment and trade, aided by information technology. Globalization has always had a significant influence on the way ideas are not only conceived but also on how they are created and delivered in the form of new technology ending up impacting operational models of most multinationals (Thompson, 2017). Apple Corporation is one such multinational company that has increased its market niche to international levels, even with the fact that the company started as a California based organization in the US. Being one of the Fortune 500 organizations that have capitalized inventively on globalization alongside keen product considering, Apple today derives almost up to 60% of its total revenues from markets outside America (Noe et al., 2017).

Using the tools and knowledge of globalization has helped the company increase its revenue returns in nations such as Asia which would not have been possible without the embracing of globalization by the management at Apple Corporation.

Secondly, Apple’s benefitting from globalization can be seen in terms of the company’s increased production at low costs as has been experienced in recent times. Not only has the company been able to discover countries and continents such as China and the Middle-East where they source for readily available resources and in effect helps it to lower the costs of production. By decreasing the costs of production, Apple has been able to significantly increase its production and sell their products at relatively lower prices, increasing its market niche in the process in the international markets. In addition to that, Apple’s effective supply chain management that has enabled it to reach out to more suppliers and to make its production processes more reliable can be attributed to it embracing globalization (Noe et al., 2017). With this type of supply chain management, Apple has been able to wade into markets like Africa, markets that were previously ruled by its competitors like Microsoft and Android.

Technology

Apple has always been known for being the leader in smart thinking, and this can be partly attributed to how the company has embraced and incorporated technology in the running of its entire systems from production to its elaborate supply chain. Thus, technology continues to play an essential role in the company’s operations, ensuring that the firm excels at all times. By technology, we mean the collection of skills, techniques, processes, and methods to produce goods and services (Wu et al., 2015). One of the ways the company has benefitted from the use of technology in their production processes is in the lowering of production cost. Advancement in technology has meant that the firm has significantly reduced the number of employees, replacing them with machines that have been able to do better work and for an extended period. Technology, as a tool, has also played an essential role in ensuring that Apple comes up with high-end quality products. Not only have these high-quality products attracted a broad base of loyal customers across the globe; it has also ensured that the company reaps big in terms of revenue growth. Use of advanced technological know-how has seen the annual revenue of Apple grow by almost 400% in Indian markets alone, according to Apple India (Wu et al., 2015). Because of technology and the advancement of it, Apple has been able to stand out from the other traditional mobile phone manufacturers through features in their range of iPhone devices. For example, create a phone with no menu button or main button or even a keyboard as was always done by other phone manufacturer players e.g. BlackBerry, Samsung, and Nokia. Additionally, technology has also helped the firm increase the number of products it can produce meeting customers high demands for its products globally. Thus, technology and globalization have been credited for the fast growth Apple Corporation has enjoyed in the software and hardware industry.

Industrial Organization Model

Industrial Organization model refers to an economic model majorly put in place by big firms to secure their perceived market niche in highly segmented markets. Different stages of the industrial organization model can be used by firms to achieve specific goals like reducing competition through policy-making, strategic studies of the behavior of firms, and coming up with anti-trust policies to keep external threats in check (Wu et al., 2015). Apple can also take advantage of the industrial organization model to not only reduce levels of competition from its competitors but also increase their revenues above the annual average income of its industry. One of the strategies Apple can use to keep in check competition is by mounting barriers to entry and significantly reducing the chances of other firms joining the industry. The other approach could be to lower the prices of all Apple products to wade off competition. For instance, in 2018, Apple dropped the prices of iPhone below the average prices in the industry increasing the sales of iPhone and subsequently experienced increased revenues at the end of that fiscal year (Thompson, 2017). The industrial-organizational model has proved a success for many companies as it has allowed firms to predict trends in the markets and effectively react to those changes in trends. Apple, like any other organization, has been able to anticipate future customer needs by developing new products such as the new iMacs, iPad mini, iPod, Airpod that have all met customers’ expectations (Wu et al., 2015).

Resource-Based Model

The second strategy is the resource-based model that Apple can apply to increase its revenues above its projected annual average earnings. A resource-based model refers to a model that sees a company’s collection of internal resources and capabilities prove superior to its performance. By this, it means that the resources that a company or an organization has can enable it to gain and sustain a competitive advantage over its competitors. The first benefit of a resource-based model is that it can help a firm to maximize the use of locally available resources (Noe et al., 2017). Just like in the case of Apple with moving its production facilities to China and the Middle-East, they have been able to effectively use the knowledge on resource-based models to increase production at relatively lower costs. This has been due to the availability of these resources needed to come up with their products being readily available in countries like Taiwan, China, Korea, Taiwan, and Singapore. Using locally available resources helps reduce the costs incurred on additional expenses like transportation when raw materials need to be imported from another country. The resource-based model also encourages the use of internal resources of the firm by managers instead of outsourcing for the same. Apple can additionally benefit from this type of model by helping it decide where to locate its operations in areas of abundant resources to increase its production capacity but at relatively lower costs which then helps the firm to generate more revenue (Noe et al., 2017).

Vision

Apple’s vision is always to make great products which will then translate into meeting the needs of all its customers. This vision was set during the reigns of its first CEO, the late Steve Jobs and which has up to date has kept the company much stronger year after year. To fulfill Job’s vision for the company, the current CEO Tim Cook has encouraged the use of technology is not only producing excellent products for its customers but also putting in place processes to ensure that customers get these products in time and good condition, by developing an efficient supply chain management for the company. Apple’s products are very simple to use and what makes their products even more amazing is that in all that simplicity, quality has not been compromised as their products are of high quality with very high levels of technology incorporation. The firm has achieved to produce excellent products that are above the average industrial standards available in the market today (Noe et al., 2017).

Mission

The mission statement of Apple is “Bringing the best products to the customers so that they can have the pleasure of using quality products.” And true to its mission statement, the firm has been able to enjoy success throughout their customer base by delivering just that, quality products. Production of high-quality products has seen the company enjoy successes around the globe with high-quality products that satisfy the needs of all its customers helping it retain its old customers while attracting new ones (Noe et al., 2017). This attraction and retention of customers have seen the company’s revenue experienced a massive boost as the innovative software and hardware of the firm acting as an attraction to more clients who need the latest mobile phones and computers.

Stakeholders

Since the start of 2013, Apple, as a company has been involved heavily in trying to address all the issues raised by its stakeholders. This journey started when the company became the first technology company to join the Fair Labor Association after a public outcry over allegations of widespread working environment conditions at one of China’s largest private employer, Foxconn (Thompson, 2017).

Apple’s stakeholders comprise of its customers, suppliers, employees, and lastly the shareholders. Having one of the largest numbers of loyal customers globally that contributes to almost 90% of the company’s total revenues; Apple is perhaps the only company that heavily relies on its customer base to efficiently run thus its customer-oriented approach business model. Apple also has more than 130,000 employees who ensure that the organization’s goals and objectives are met at all times (Thompson, 2017). Given different duties in different stores ranging from sales to marketing, the employees play a vital role in the success of the company and are treated as part and parcel of the organization thus are involved in its day to day running. With policies that protect workers exploitation, the company worked hard to ensure workers are not overworked and that they are exposed to better working conditions by prioritizing their safety.

The other categories of stakeholders are investors. Investors are the significant financiers of Apple Corporation. Investors’ equity amounted to 107.147 billion US dollars by the end of 2018 (Thompson, 2017). Some of these investors contribute generously to the leadership of the organization, ensuring that the firm remains profitable always. Investors like Arthur Levisohn, chairman, Tim Cook, CEO and Jeffrey Williamson, chief operating officer are also leaders to the firm. The last stakeholders are the suppliers who ensure that the firm gets the raw materials at the right time and this helps the firm to always continue with its production processes and not to experience any down breaks in the process of production or its supply chain. All the stakeholders have essential roles to play to ensure that the firm is successful (Thompson, 2017).

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